Abdul Sattar Bachani (Appellant) VS Returning Officer & Others (Respondent)

ORDER SHEET 123s

IN THE HIGH COURT OF SINDH KARACHI

Election Appeal No. 105 o120L8

DATE Onoen Wtrs SIcNlarunr OFJUDGE

For hearing of Main Case

Mr. Farooq H. Naek, Advocate for the Appellant.

Syed Mehmood Alam Rizvi, Advocate for the Respondent No' 2 Mr. Luqman-ul-Haque, Advocate for the Resporrdent No. 3. Mr. Riaz AIam Khan, Advocate for the I{espondent No. 4. Mr. Abdullah Han;ralr, Law Officer of ECP.

Mr. Atif-ud-Din, Law Officer of SBP.

Mr. Yousif Rahpoto, Assistant Advocate General Sindh Ms. Rukhsana Durrani, State Counsel.

The Appellant filed nomination papers for NA-224, however, the same were rejected by the Returning Officer vide order dated 19.06.2018 largely on account of the fact that the Appellant was a loarr clefaulter Learned counsel for the Appellant submittecl that he was not a loan defaulter and did not fall within the mischiei of Article 63(1)(n). He

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admitted that a loan had been taken by Bacham Sugar Mills and he was one of the directors of the Company. He however, pointed out that Company had entered into a compromise decree with a consortium of banks and as such he had no further liability, the responsibility vested with another Company to payoff the ban.k loan pursuant to the compromise agreement and that though he was a drector of the Company prior to the compromise agreement his ownersl-rrp was only 7.43%. He also referred to a no dues certificate which harl been issued by tl'rc' bank consortium which stated tl-ra t he had no further liabilrty to them which shows that he was not a defaulter and as such Article 63(1)(n) would not be applicable to him. Thus for all the above reasons the decisron of the Returning Officer should be set aside and he should be enhtled to contest

the elections. In support of his contentions he placed reliance on 1'1.94 SCMR 1.299, 201"3 CLC 7088,7993 MLD 2507, 1997 CLC 7L9 nnd 2016 YLR Learned counsel for the Respondents submittetl that the Appellant was a loah defaulter as the loan has been taken by the Bachani Sugar Mills for which the Appeltant was a director and that the Appellant Save a personal guarantee for a payment of the dues which were still outstanding because the Company which was supposed to rePay the outstanding amount to the consortium of banks Pursuant to the compromise agreement had defaulted and the liability therefore returned to the Appellant and as such he was a loan defaulter and disqualifiecl from contesting the elections; that he had concealed assets iu his nomination papers and again on this account he was not qualified to stand for the elections. That the no dues certificate presented by hirn was false and has been signed on behalf of many banks none of whose accounts had been disclosed in his nomination papers; that this was a case of loan write off as

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shown by a.SBP certilicate. Learned counsel for the Respondent No. 4 placed reliance on PLD 201.7 Lahore 394 and 20-14 CLC g4 and 201.3 CLC For all the above reasons, the Responclents submitted that the Returhing Officer rightly rejected the nomination papers of the APPellant namely Mr. Abdul Sattar Bachani. Both the legal adviser of Election Commission of Pakistan and the learned Assistant Advocate General Sindh, supported the arg.uments of the Respondents

I have heard the parties, perused the recorrl .rnd considered the relevant law

tztl0 In my view, it is true that the Appellant compromisecl the matter wilh the consortium of banks and on failure to pay the compromise by the concerned company the liability of the Appellant came back to life and as such th9 Company of which he was a director was responsible for loan default. However, it appears that the Appellant hacl a minor shareholding in the defaulting Company and not a major shareholding in Company + with no controlling interest thus in my view he cannot be regarded as a loan defaulter.

With regard to controlling interest reliance is placed on 201'3 CLC 7068 releaant Page-7077 which reads as under: - In the first place, admittedhl the shareholding of the Vetitioner is not more tlmt 30% of the total sharcholiling in the Company. It is not argued that the Company is a /amily outned concern. The petitioner does not hold controlling interest in the Company. Therefore, he cannot be saiil to hazte obtained the loan for himself ht tanns of Article 63(1,)(il of the Constitution of lslatnic llepublic of Pakistan, 1973. Further the Compatnl is not ottsned or controlled by the sPouse or depenclent clrildren- fierefore, he cannot be held liable /or the amounts owned by the Company".

t Likewise in1"997 CLCng atPara-8 which r:etrds;rs under: - '8, Tlrc loan was obtained by the contpany in which respondent No. L and his uife are shareholders according to the list of shareholders (Fortn-A) placed on the record by the petitioner himself. According to the document there are in all 42,75,200 slmres out of which respondent No, 1 and his zoile are holders of 5,00,000 shares each. Total sharelu.tlding of petitioner and his zt:ift are holders of 5,00,00A slmres each,'I otal shareholding of petitioner and ltis tuife conrcs to 10,00,000 out of 42,75,200 shares, tlterefore, tlrcir shareholding is less than 51o/o in tlrc Contpany. Accortling to Ordinance XX of 7993 anq persott holding less than 510/o shares in a Cotn1tany ruhiclt is '' a defaulter in regard to loan obtaitrcd by tlrc said Company, u)as not disqualified to cotttest electiotts as he in his yersonal capacity r.uts treated in suclt circumstances not to /all within tlrc dcfinitiou of a defaulter. As rcgards rcsponilent No. t haaing stood + surety for the payment of the loatt obtained ba tlrc Company is concertted, there is no docruuent on tlte record to establish this".

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lZ t4l Reliance ir-n this respect is also placed ott201'3 CLC 1088' With regard to any personal guarantee which the Appellant may have given this would not bring him within the clefinition of a defaulter In this respect reliance is placed on 2016 WR 1401.

With regard to write off no doubt this is a ground for + disqualification. It appears from report producecl by the State Bank of Pakistan that Bachani Sugar Mills in which Mr. Abdul Sattar Bachani had an interest had an amount written off. Ordinarily, this would be a ground for disqualificaiion as was held in 20L3 CLC 15L2' I-Iowever, as I have already found that since Mr. Abdul Sattar Bachani did not have a controlling interest in the defaulting Company ancl thus could not be liable as a defa,ulter of the Company Ior the purposes of Article tr3(1)(n) in my view by,the same token he cannot be liable for any wlittt'tr off loan of the Company.especially as this loan was taken in the Company's name and not in his personal capacity.

t With regard to the other objections raised by the Respondents these were not raised at the time of scrutiny before the Ileturning Officer and have been raiserJ as new grounds unrler Section (;0(-l) of tlrr-' tilcction Act, 2017. Even, after considering such new objections such as concealment of assets etc., I am of the view that these involve a detailed factual inquiry ti- which are beyond the scope of this Tribunal's mancl;rte.

Under these circumstances, the order of thc Returning Officer is overturned, the Appeal is allowed and Mr. ALrtlul ljattar Bachani is hereby ' t.-- u--2 allowed to contest elections - r NA-224.

JUDGL